Illinois sports betting could face more problems as city officials think about adding a new tax. Mayor Brandon Johnson has suggested a 10.25 percent tax on online sports bets in Chicago. But a group of state lawmakers is asking city leaders to carefully reconsider the plan.

The lawmakers say the extra city tax could hurt the sports betting market. Illinois already has a state tax system with tiered rates and a per-bet fee. They warn that adding a high city tax could push bettors to unregulated offshore websites and lower overall revenue for the city and state.

Lawmakers Raise Concerns About Offshore Betting

Thirty state representatives have sent a warning to Chicago’s 50 alderpersons about the possible problems of adding a city tax on top of existing state taxes. They say that stacking taxes this way could make it much harder for legal sports betting companies to compete. Higher costs for bettors could drive people away from legal sites and toward untaxed alternatives.

The lawmakers also point out that when taxes get too high, many bettors turn to websites outside the state. These offshore sites are not regulated or taxed by Illinois and could see more traffic. This could lead to less money for local businesses, fewer jobs in the city, and lower revenue for the city and state. They are asking city officials to think carefully about how the new tax might affect legal sports betting.

Illinois Sees Big Sports Betting Numbers Despite Tax

Even with the new taxes, Illinois has seen large amounts of sports betting activity. In September, the state reached a record $1.42 billion in total bets. While this shows that sports betting remains popular, some experts say the higher fees and taxes are already causing fewer bets compared to previous months.

The lawmakers’ concerns also come as other states adjust their sports betting taxes. In New Jersey, lawmakers scaled back a proposed tax increase from 25 percent to 19.75 percent. In Louisiana, the sports betting tax was increased from 15 percent to 21.5 percent. These examples show that states are trying to balance the need for higher revenue with keeping bettors in the legal market.

Industry Predicts More Tax Changes

Industry experts told iGB that lawmakers are likely to continue looking for ways to increase revenue from sports betting. Many expect additional tax proposals in the 2026 legislative sessions.

The Illinois lawmakers’ pushback highlights the tension between raising revenue and keeping the sports betting market healthy. City and state officials will have to carefully weigh their options. Their decisions could affect how many people bet legally, how much money the state collects, and the future growth of the sports betting industry in Illinois.